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Hello,
I have a question related to question 4. from December 2009 exam.
It is about the statement of financial position, part b). Why the value of Long-term bank loan in the next year is not changed(is the same)? =$10m
Thank youBecause it is a long-term loan, we must assume that it will not have been repaid next year, and so it remains at $10M.
There will be interest on the loan, but we assume that the interest is paid each year as due, and so it is not added to the loan.
There is no mention of the loan being increased, and so we must assume that it remains the same.
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